‘‘I despair at times at why the equity markets can’t see how serious the credit crunch is’, said one senior credit analyst at an investment bank. ‘They just trade off the day-to-day newsflow’. This interview from yesterday’s Financial Times reminds me of last July, when I noted how financial markets seemed to have become divorced […]
Chemicals and the Economy
60 is the new 40 for BP
Very few non-OPEC oil projects have been financed in recent years, although market prices have risen from $20/bbl to $100/bbl. This is because oil companies and banks assumed that current prices would fall back to $40/bbl, or even lower, within 3 – 5 years. But a new reality has been dawning, summed up by Total’s […]
Dow, Basell, BASF, SABIC owed $5m in Plastech bankruptcy
Chemical companies tend to trade on ‘open book’ terms with long-established customers. They are also supportive when those customers are facing problems in their end-markets. In a recession, these admirable qualities can become expensive. ICIS news reports tonight that the bankruptcy of Plastech Engineered Products in the US has led to debts of nearly $5m […]
OPEC holds quotas, rebuffs Bush
OPEC’s decision to hold its production quota at last Friday’s meeting came as no surprise to the markets, which were busy taking prices down $2/bbl on renewed fears of a US recession. But it did produce a warning from the International Energy Agency (IEA) that OPEC’s policies ‘threaten the strength of the global economy’. The […]
US housing, China storms hit chemical demand
Andrew Liveris, Dow’s CEO, commented today that Dow now have ‘a total clampdown on costs and capital expenditure’. Whilst other CEO’s told the Financial Times that ‘rising oil prices, sagging consumer confidence and the on-going credit crunch’ are causing them to put in place ‘contingency plans to protect against the expected economic downturn’. Separately, Bill […]
Winter storms batter China’s economy
On my regular trip to Asia, the major news is the snowstorms battering China. These started on 10 January, and are expected to continue for at least another week. The transportation system seems to have ground to a standstill in many areas as a result. and so essential coal and food supplies are not reaching […]
IMF identifies ‘serious slowdown’
The credit crunch and associated debt crisis has elicited an unprecedented response from the International Monetary Fund (IMF). Today, the head of the IMF, Dominique Strauss-Kohn, told the Financial Times that the new IMF economic forecasts would ‘show a serious economic slowdown that needs a serious response’. Just last autumn, the IMF was calling for […]
China’s olefin imports surge as government subsidises gasoline/diesel demand
China’s ethylene and propylene imports have surged in recent months, as the country has diverted naphtha to supply gasoline and diesel needs. ICIS news, reporting official China Customs figures, says 2007 ethylene imports were over 400% higher at 510KT, versus just 117KT in 2006. Ethylene exports also more than halved to 50KT in 2007, from […]
CEO confidence falls
CEOs seem to be following CFOs in worrying about the impact of the credit crunch and debt crisis. The annual CEO survey by PwC of 1150 executives shows that fears of a downturn now top their list of concerns. US CEOs are much less confident than a year ago, with only 35% now ‘very confident’ […]
Polymer margins retreat
The new ICIS Weekly Margin report on polyethylene is a goldmine for those who want to track the fortunes of the petchem industry. The recent issue contains good news and bad news for producers: • The good news is that PE margins have improved during January for integrated producers as a result of lower feedstock […]
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